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Renovation

Renovation loan "Modern"

The loan is provided to RA citizen and/or resident private individuals for renovation of an apartment or a house.

Conditions of lending

Loan currency and amount
AMD, USD, Euro from AMD 2 mln. to AMD 30 mln. / its equivalent in foreign currency
Maturity
24-120 months
Annual nominal interest rate Loan/collateral Floating interest rate
PTI
USD EUR AMD
Up to 50%

11%

(CBFR + 8.5)%

9.25%

(CBFR + 9.55)%

15.25%

(CBFR + 9)%

AMD ≤60%
USD ≤50%
50.1-70%

12%

(CBFR + 9.5)%

10.25%

(CBFR + 10.55)%

16.25%

(CBFR + 10)%

AMD ≤50%
USD ≤45%

For loans in foreign currency, the interest rates set are reduced by 0.5 percentage points, if all of the following conditions are met simultaneously:

  •  PTI ≤40%, and
  •  the loan maturity is 120 months, and
  •  The borrower insures the collateral item for the amount at least equal to the balance of the loan
Loan disbursement fee 0.5 percent of the loan amount, minimum AMD 25,000 (charged before disbursement of the loan)
Fee for review of the loan application AMD 5,000 (charged once, at the time of recording the loan application)
Credit account service fee AMD 2,000 per month

*CBFR (Converse Bank floating rate)

In case of floating interest rates, the maximum threshold for raising and reducing the nominal interest rate is set at +/- 4 percentage points.
The resulting nominal interest rate is rounded to one hundredth.

 ** PTI - The ratio of the maximum amount of monthly installments for the principal loan amount and the accrued interest to the monthly net income of the borrower and other members running common household with the borrower and the co-borrower/s/, if any.

General provisions and conditions

Restrictions

  •  PTI≤45-60%, depending on the size of the loan/collateral ratio
  •  At the time of applying for the loan, the sum of the applicant's age and the loan maturity cannot exceed 65
  •  An apartment/house owned by the borrower is renovated/improved
  •  One guarantor/co-borrower is required
  •  Requirements towards the credit history of the borrower and other persons running common household with the borrower (according to ACRA inquiry and based on other information collected by the Bank from other sources):

a) At the time of applying for the loan, the applicant shall not have overdue credit liabilities (including guarantees), as well as current guarantees classified by a class stricter than standard
b) During the last one year preceding the date of applying for the loan, there shall not be any classification stricter than standard, as well as delays for total 25 and more days in repayment of all loans existing in the applicant's name (these conditions don't apply towards guarantees)
c) At the time of applying for the loan, the persons running common household with the applicant shall not have current overdue credit liabilities and/or liabilities classified by a class stricter than standard (including guarantees)

Procedure of repayment of the loan and interest amount

Is repaid monthly, in one of the following manners:

  •  Annuity
  •  Spring-like.

The loan can be disbursed by stages (maximum 5 tranches); if the loan amount exceeds AMD 10 mln./its equivalent in foreign currency, the conditions of disbursement by stages is mandatory.

The loan can be disbursed with a grace period up to 6months, during which the borrower can get the whole loan amount or a part of it.

Penalty in case of delay in repayment of the loan and/or interest

In case of violation of the repayment terms specified by the agreement, the Borrower pays penalty to the Bank at the rate of 0.13% of the overdue amount for each day of delay.

Security

Purchased real estate

The loan/collateral ratio is calculated taking as a basis the appraised liquid value of the collateral (the maximum ratio is 70%).

List of required documents to be submitted to the Bank

1. The loan application-questionnaire
2. Personal identification document, public services number, or a reference on absence of a public services number issued by the body running the state register of the population (isn’t required, if the customer submits an identification card, where the public services number is specified)
3. Reference on the place of residence, specifying the family members living together
4. Reference from the place of employment, the issue date of which as of the day of submission to the Bank shall not exceed 20 calendar days. The applicant can also be required to present a copy of his/her available annual individual report presented by the employer for the applicant.
4.1. In case of conducting other not entrepreneurial activity /e.g. investments, giving property for rent, investments in deposits, etc./ reference on income received from those activities should be submitted
4.2. In case of conducting entrepreneurial activity:

  •  a reference on income received from the activity – for legal entities
  •  financial analysis – for private entrepreneurs and private individuals

4.2.1. If required, in case when the applicant is a private entrepreneur - a reference from the SRC regarding the applicant's liabilities towards the state, and if the applicant conducts certain activity for which licensing or permission for the activity is required – also the respective license and/or permission, if it is a factor significantly affecting the applicant’s income
5. The original of the ownership right certificate for the property being renovated/improved and the basis of acquisition (purchase and sale agreement, inheritance certificate, etc.) shall be submitted before disbursement of the respective loan (in exceptional cases, it can be required by the Bank before approval of the loan application)
6. A consolidated statement regarding restrictions on the pledged property issued by the Real Estate Cadaster of the Government of RA (after approval of the loan)
7. Marriage certificate/s/ (if any) of the Borrower and pledgers (if they are different persons)
8. Certificate/act on preliminary evaluation of the collateral
9. ACRA reports on the pledger/s/ (before approval of the loan)
10. Cost estimate for the intended renovation works, and in case of works that require a construction permit – also the respective construction permit, specifying the expected completion date of the works
11. Other documents, as requested by the Bank.

Other mandatory conditions

  •  the Borrower undertakes to complete the renovation/improvement works within a period predetermined by the agreement, but not later than within 1 /one/ year, after which target usage of the loan should be monitored, and the monitoring results should be documented and stored, in accordance with the respective internal legal acts
  •  The early loan repayment penalty, the fine, commission, compensation, or other unfavorable conditions for the borrower are specified by the loan agreement concluded between the Bank and the borrower.

Deferring regular installment

Based on the request of the borrower, a regular installment for the latter’s loan can be deferred. The purpose of the deferment is to offer an opportunity to skip the installment for the next month on to the schedule, in case of a temporary change in financial flows (vacation, etc.), by means of relocating the whole amount (principal and interest) to be repaid during the respective month for subsequent months on the schedule (in case of monthly installments, the amount is shifted and added to the amount of repayment set for the month following the next month).

It is done by means of capitalization of the interest payable for the next month to the principal amount of the loan. The capitalized interest shall be relocated together with the principal amount of the following month on all subsequent months on the schedule, following the next month.

The possibility of deferring a regular installment is applicable towards loans of “Noramut”, “Noruyt”, and “Modern” types, serviced minimum for six months, with the following restrictions towards applicability thereof:

  •  The aggregate amount of the obligation for the upcoming month, arising from capitalization, shall not exceed the total principal amount repaid from the beginning of the loan repayment term
  •  Deferment of a regular installment is not applicable during the grace period, as well as for loans with revised schedule
  •  At the time of requesting deferment of a regular installment, there shall not be a total delay in repayment of the respective loan for more than 6 days, the loan shall be classified as “standard”, and the borrower shall not have overdue liabilities towards the Bank, as well as shall not have any delay with the installment preceding the one considered for deferment
  •  for loans with maturity less than 60 months, a regular installment can be deferred only once throughout the validity period of the loan
  •  for loans with maturity of 60 months and longer, a regular installment can be deferred maximum 5 times throughout the validity period of the loan, except for the last 2 years set by the schedule; deferment is possible only once during a reporting year